Disturbances in cortical oscillations are thought to be core to the pathophysiology of sensory and cognitive processing impairments in schizophrenia, with impairments in the gamma-band (30-100 Hz) as well as lower frequency-bands such as theta (4-8 Hz) and alpha (8-12 Hz). There is growing evidence that modulation of gamma by lower frequency bands is also critical for normal sensory and cognitive processing. Accordingly, restoring gamma activity may be necessary but not sufficient for restoring cognitive function, which requires the organizing influence by lower frequency modulations. While such cross-frequency coupling (CFC) is thought to be a core neurocomputational mechanism for regulating gamma oscillations in the service of cognition, CFC has been largely ignored in in schizophrenia research. The current project aims to address this important gap by conducting the first systematic investigation of CFC disturbances in schizophrenia employing an integrated magnetoencephalography (MEG) and computational modeling approach. Investigations of CFC most commonly examine phase-amplitude coupling, reflecting lower frequency changes in membrane excitability that systematically modulates the amplitude of higher frequency oscillations of the local network. Preliminary studies show evidence of disturbances in such phase-amplitude coupling in schizophrenia. Patients performing the auditory steady-state response (ASSR) task, a sensory cortical periodic driving paradigm, showed impaired alpha-gamma coupling compared to controls. Preliminary findings also show prefrontal cortical theta-gamma CFC in healthy controls during working memory performance with strong correlations with working memory capacity, demonstrating feasibility for investigating CFC disturbances in schizophrenia patients. Finally, preliminary computational work modeled post-mortem findings of disturbances in fast-spiking interneurons (FSI) as 'lesions' to the model FSI, reproducing disturbances in alpha-gamma CFC. Given these findings, we hypothesize that sensory and prefrontal cortical CFC will be disturbed in schizophrenia and that FSI disturbances are sufficient to provide a mechanistic account of CFC disturbances. These hypotheses will be addressed through the following Specific Aims: (1) To investigate sensory cortical CFC disturbances in early psychosis; (2) To investigate prefrontal cortical CFC disturbances in early psychosis; and (3) To investigate neurocomputational mechanisms of CFC disturbance in early psychosis. We anticipate that this study in early psychosis will reveal disturbances in CFC, a critical organizing mechanism for neural activity underlying sensory and cognitive processing. Together, the findings of this project will provide a novel empirical and theoretical framework for future studies that will aim to pharmacologically target specific components of cortical circuitry o enhance CFC and cognition in schizophrenia.